Posted by
Ed Sherrill on Tuesday, May 06, 2008 2:32:47 PM
If you love ethanol, check this out. You might change your mind.
Corn ethanol would not exist at all without Uncle Sam. The handouts began with ethanol tax credits in the Energy Tax Act of 1978. It was an attempt to solve two problems at once: our vulnerability to oil shortages and corn prices that had been depressed by our agricultural subsidies. In 1980, a punitive tariff of 50 cents per gallon was laid against ethanol imports (the rate today is 2.5 percent plus 54 cents). This and government sugar-price supports and tariffs guaranteed that American corn would be the only cost-effective feedstock for ethanol. Ethanol producers also became eligible in 1980 for government-guaranteed loans for up to 90 percent of their construction costs. (By 1988, the government had lost $352 million in defaults.) The government provided other assistance as well — R&D funding, for example.